IPC reports that its monthly sentiment study found:
- Nine in 10 electronics manufacturers report rising materials costs with nearly three-fourths reporting rising labor costs.
- While order flow remains positive, higher costs are hurting profit margins; 58% reported expanding orders, but 40% reported a decline in profit margins, and 19% reported profit margin improvement
Meanwhile, the trade association’s December economic outlook report, released at the same time, showed that supply chain disruptions this year have resulted in “pent-up demand that should help carry growth into the first half of 2022.”
“While we have lowered our forecast somewhat, 2022 should still be a historically strong year,” Shawn Dubravac, Chief Economist at IPC, said.
“Incoming data is consistent with IPC’s monthly sentiment study,” IPC explained. “There is capacity to buy, among both consumers and businesses, but supply chain constraints have limited potential growth in spending and investment. Manufacturers report strong order growth, but growth is being offset by higher costs and as a result profit margins are declining.”
About IPC
IPC is a global industry association based in Bannockburn, Ill., dedicated to the competitive excellence and financial success of its 3,000 member companies which represent all facets of the electronics industry, including design, printed board manufacturing, electronics assembly and test. As a member-driven organization and leading source for industry standards, training, market research and public policy advocacy, IPC supports programs to meet the needs of an estimated $2 trillion global electronics industry.
